As filed with the Securities and Exchange Commission on January 6, 1998.
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________________
UNISOURCE ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
___________________
Arizona 86-0786732
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
220 West Sixth Street
Tucson, Arizona 85701
(520) 571-4000
(Address of principal executive offices)
UNISOURCE ENERGY CORPORATION 1994 OUTSIDE DIRECTOR STOCK OPTION PLAN
(Full title of the plan)
Dennis R. Nelson, General Counsel
UniSource Energy Corporation
220 West Sixth Street
Tucson, Arizona 85701
(Name and address of agent for service)
Telephone number, including area code, of agent for service:
(520) 571-4000
___________________
<TABLE>
CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C> <C>
Proposed Proposed
maximum maximum
Title of Amount offering aggregate Amount of
securities to be price offering registration
to be registered registered per unit price fee
Common Stock, no par 120,000(1) $18.03125(2) $2,163,750(2) $645(2)
value shares
<FN>
<F1> This Registration Statement covers, in addition to the
number of shares of Common Stock stated above, options and
other rights to purchase or acquire the shares of Common
Stock covered by the Prospectus and, pursuant to Rule
416(c) under the Securities Act of 1933, an indeterminate
number of shares which by reason of certain events
specified in the UniSource Energy Corporation 1994 Outside
Director Stock Option Plan (formerly the Tucson Electric
Power Company 1994 Outside Director Stock Option Plan and
referred to herein as the "Plan") may become subject to the
Plan.
<F2> Pursuant to Rule 457(h), the maximum offering price, per
share and in the aggregate, and the registration fee were
calculated based upon the average of the high and low
prices of the Common Stock on January 2, 1998 as reported
on the New York Stock Exchange.
</FN>
</TABLE>
The Exhibit Index for this Registration Statement is at page S-3.
<PAGE>
PART I
INFORMATION REQUIRED IN THE
SECTION 10(a) PROSPECTUS
The documents containing the information specified in
Part I of Form S-8 (plan information and registrant information)
will be sent or given to optionees as specified by Rule 428(b)(1)
of the Securities Act of 1933, as amended (the "Securities Act").
Such documents need not be filed with the Securities and Exchange
Commission (the "Commission") either as part of this Registration
Statement or as prospectuses or prospectus supplements pursuant to
Rule 424 of the Securities Act. These documents, which include the
statement of availability required by Item 2 of Form S-8, and the
documents incorporated by reference in this Registration Statement
pursuant to Item 3 of Form S-8 (Part II hereof), taken together,
constitute a prospectus that meets the requirements of
Section 10(a) of the Securities Act.
<PAGE>
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission are
incorporated herein by reference:
(a) Annual Report on Form 10-K filed on March 3, 1997
by Tucson Electric Power Company ("TEP"), as
predecessor to UniSource Energy Corporation, for
TEP's fiscal year ended December 31, 1996;
(b) Quarterly Reports on Forms 10-Q filed by TEP for
its quarterly periods ended March 31, 1997, June
30, 1997 and September 30, 1997;
(c) Current Reports on Forms 8-K filed by TEP and dated
November 19, 1997, November 14, 1997, November 7,
1997, July 11, 1997, July 9, 1997, and June 26,
1997;
(d) Current Report on Form 8-K filed by UniSource
Energy Corporation (the "Company") and dated
January 6, 1998; and
(e) The description of the Company's Common Stock
contained in the Company's Registration
Statement on Form 8-A, filed with the Commission
on December 23, 1997.
All documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), prior to the filing
of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities
then remaining unsold shall be deemed to be incorporated by
reference into the prospectus and to be a part hereof from the date
of filing of such documents. Any statement contained herein or in
a document, all or a portion of which is incorporated or deemed to
be incorporated by reference herein, shall be deemed to be modified
or superseded for purposes of this Registration Statement to the
extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not
be deemed, except as so modified or amended, to constitute a part
of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
The Common Stock is registered pursuant to Section 12 of
the Exchange Act. Therefore, the description of the securities is
omitted.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The validity of the original issuance of Common Stock
registered hereby is passed on for the Company by Dennis R. Nelson.
Mr. Nelson is the General Counsel of the Company and is compensated
as an employee of the Company.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Arizona corporate law generally authorizes, on a non-
exclusive basis, indemnification of officers and directors who have
acted or failed to act, in good faith, in a manner believed to be
in or not opposed to the best interest of the Company (with certain
limitations in the case of actions by or in the right of the
Company) and mandates such indemnification in the case of an
officer or director who is successful on the merits or otherwise in
defense of claims by reason of the fact or such status as an
officer or director.
Article SIXTH of the Amended and Restated Articles of
Incorporation of the Company provides, in part, as follows:
(B) No director of the Company shall be personally
liable to the Company or its shareholders for money damages
for any action taken or any failure to take any action as a
Director; provided, however, that nothing herein shall be
deemed to eliminate or limit any liability which may not be
so eliminated or limited under the laws of the State of
Arizona, as in effect at the effective date of this paragraph
(B) of Article SIXTH or as thereafter amended. No amendment,
modification or repeal of this paragraph (B) shall eliminate
or limit the protection afforded by this paragraph (B) to a
director with respect to any act or omission occurring before
the effective date thereof.
(C) (1) The Company shall, to the maximum extent
permitted by applicable law, as from time to time in effect,
indemnify any individual who is or was a party to or
otherwise involved in (or threatened to be made a party to or
otherwise involved in) any Proceeding (as hereinafter
defined) because such individual is or was a director or
officer of the Company, or, while a director or officer of
the Company, is or was serving at the request of the Company
as a director, officer, partner, trustee, employee or agent
of another foreign or domestic corporation, partnership,
joint venture, trust, employee benefit plan or other
enterprise, against all Liability (as hereinafter defined)
incurred by such individual in connection with such
Proceeding.
As used in this paragraph (C) of Article SIXTH,
(a) the term "Expenses" includes attorneys' fees and all
other costs and expenses reasonably related to a Proceeding,
(b) the term "Liability" means the obligation to pay a
judgment, settlement, penalty or fine (including any excise
tax assessed with respect to an employee benefit plan) and
reasonable Expenses incurred with respect to a Proceeding,
and includes without limitation obligations and Expenses that
have not yet been paid but that have been or may be incurred,
and (c) the term "Proceeding" means any threatened, pending
or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative and whether formal
or informal, including without limitation any action, suit or
proceeding by or in the right of the Company and including,
further, any appeal in connection with any such action, suit
or proceeding.
(2) The Company shall, to the maximum extent
permitted by applicable law, pay any Expenses incurred by a
director or officer of the Company in defending any such
Proceeding in advance of the final disposition thereof upon
receipt of any undertaking by or on behalf of such individual
to repay such advances if it is ultimately determined that
such individual did not meet any standard of conduct
prescribed by applicable law and upon the satisfaction of
such other conditions as may be imposed by applicable law.
(3) The Company by resolution of the Board of
Directors, may extend the benefits of this paragraph (C) of
Article SIXTH to employees and agents of the Company (each
individual entitled to benefits under this paragraph (C)
being hereinafter sometimes called an "Indemnified Person").
(4) All rights to indemnification and to the
advancement of expenses granted under or pursuant to this
paragraph (C) shall be deemed to arise out of a contract
between the Company and each person who is an Indemnified
Person at any time while this paragraph (C) is in effect any
may be evidenced by a separate contract between the Company
and each Indemnified Person; and such rights shall be
effective in respect of all Proceedings commenced after the
effective date of this paragraph (C), whether arising from
acts or omissions occurring before or after such date. No
amendment, modification or repeal of this Article shall
affect any rights or obligations theretofore existing.
(5) The Company may purchase and maintain
insurance on behalf of, or insure or cause to be insured, any
individual who is an Indemnified Person against any Liability
asserted against or incurred by him in any capacity in
respect of which he is an Indemnified Person, or arising out
of his status in such capacity, whether or not the Company
would have the power to indemnify him against such liability
under this Article. The Company's indemnity of any
individual who is an Indemnified Person shall be reduced by
any amounts such individual may collect with respect to such
liability (a) under any policy of insurance purchased and
maintained on his behalf by the Company or (b) from any other
entity or enterprise served by such individual.
(6) The rights to indemnification and to the
advancement of Expenses and all other benefits provided by,
or granted pursuant to, this Article shall continue as to a
person who has ceased to serve in the capacity in respect of
which such person was an Indemnified Person and shall inure
to the benefit of the heirs, executors and administrators of
such person.
(7) The Board of Directors shall have the
power and authority to make, alter, amend and repeal such
procedural rules and regulations relating to indemnification
and the advancement of Expenses as it, in its discretion, may
deem necessary or expedient in order to carry out the
purposes of this Article, such rules and regulations, if any,
to be set forth in the Bylaws of the Company or in a
resolution of the Board of Directors.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
See the attached Exhibit Index on page S-3.
ITEM 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus
required by Section 10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any
facts or events arising after the effective date of
this Registration Statement (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set forth in
this Registration Statement; and
(iii) To include any material
information with respect to the plan of
distribution not previously disclosed in this
Registration Statement or any material change to
such information in this Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant with or
furnished to the Commission pursuant to Section 13 or Section
15(d) of the Exchange Act that are incorporated by reference
in this Registration Statement;
(2) That, for the purpose of determining any
liability under the Securities Act, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act,
each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Exchange Act (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Exchange Act) that is incorporated by
reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(h) Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions
described in Item 6 above, or otherwise, the registrant has been
advised that in the opinion of the Commission such indemnification
is against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final adjudication
of such issue.
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the
Securities Act of 1933, the registrant certifies that it has
reasonable grounds to believe that it meets all of the requirements
for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Tucson, State of Arizona, on
December 31, 1997.
UNISOURCE ENERGY CORPORATION
By: /s/ Charles E. Bayless
Charles E. Bayless
Its: Chairman, President and Chief
Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and
appoints Charles E. Bayless and Dennis Nelson, or each of them
individually, his or her true and lawful attorney-in-fact and agent
with full powers of substitution and resubstitution, for him or her
and in his or her name, place and stead, in any and all capacities,
to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same,
with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agent, full power and authority to
do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or any
of them individually, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Act, this
Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
SIGNATURE TITLE DATE
/s/ Charles E. Bayless Chairman, President December 31, 1997
Charles E. Bayless and Chief Executive Officer
(Principal Executive Officer)
/s/ Ira R. Adler Senior Vice President December 31, 1997
Ira R. Adler and Chief Financial Officer
(Principal Financial Officer)
/s/ Karen G. Kissinger Vice President and Controller December 31, 1997
Karen G. Kissinger
/s/ Elizabeth T. Bilby Director December 31, 1997
Elizabeth T. Bilby
/s/ Jose L. Canchola Director December 31, 1997
Jose L. Canchola
/s/ John L. Carter Director December 31, 1997
John L. Carter
/s/ John A. Jeter Director December 31, 1997
John A. Jeter
/s/ R.B. O'Rielly Director December 31, 1997
R.B. (Buck) O'Rielly
/s/ Martha R. Seger, Ph.D Director December 31, 1997
Martha R. Seger, Ph.D.
/s/ Donald G. Shropshire Director December 31, 1997
Donald G. Shropshire
/s/ H. Wilson Sundt Director December 31, 1997
H. Wilson Sundt
</TABLE>
<PAGE>
<TABLE>
EXHIBIT INDEX
<S> <C>
Exhibit
Number Description
4.1 Tucson Electric Power Company 1994 Outside
Director Stock Option Plan.
4.2 Form of Option Agreement.
5. Opinion of Counsel (opinion re legality).
15. Letter re unaudited interim financial
information.
23.1 Consent of Deloitte & Touche LLP (consent of
independent auditors).
23.2 Consent of Counsel (included in Exhibit 5).
24. Power of Attorney (included in this
Registration Statement under "Signatures").
</TABLE>
<PAGE>
EXHIBIT 4.1
TUCSON ELECTRIC POWER COMPANY
1994 OUTSIDE DIRECTOR STOCK OPTION PLAN
TABLE OF CONTENTS
Page
Section 1
Establishment, Purpose and Effective Date of Plan. . . . . . . 1
1.1 Establishment. . . . . . . . . . . . . . . . . . 1
1.2 Purpose. . . . . . . . . . . . . . . . . . . . . 1
1.3 Effective Date . . . . . . . . . . . . . . . . . 1
Section 2
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.1 Definitions. . . . . . . . . . . . . . . . . . . 1
Section 3
Eligibility. . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.1 Eligibility. . . . . . . . . . . . . . . . . . . 2
Section 4
Administration . . . . . . . . . . . . . . . . . . . . . . . . 2
4.1 Administration . . . . . . . . . . . . . . . . . 2
Section 5
Duration of Plan . . . . . . . . . . . . . . . . . . . . . . . 2
5.1 Duration of Plan . . . . . . . . . . . . . . . . 2
Section 6
Stock Options. . . . . . . . . . . . . . . . . . . . . . . . . 3
6.1 Initial Grant. . . . . . . . . . . . . . . . . . 3
6.2 Annual Awards. . . . . . . . . . . . . . . . . . 3
6.3 Exercise Price . . . . . . . . . . . . . . . . . 3
6.4 Vesting. . . . . . . . . . . . . . . . . . . . . 3
6.5 Expiration . . . . . . . . . . . . . . . . . . . 3
6.6 Payment. . . . . . . . . . . . . . . . . . . . . 3
6.7 Agreement. . . . . . . . . . . . . . . . . . . . 3
6.8 Lapsed Awards. . . . . . . . . . . . . . . . . . 3
6.9 Restrictions on Stock Transferability. . . . . . 4
6.10 Non-Transferability of Options . . . . . . . . . 4
6.11 Beneficiary Designation. . . . . . . . . . . . . 4
Section 7
Adjustment in Capitalization . . . . . . . . . . . . . . . . . 4
7.1 Adjustment in Capitalization . . . . . . . . . . 4
Section 8
Termination of Service . . . . . . . . . . . . . . . . . . . . 4
8.1 Termination of Service . . . . . . . . . . . . . 4
Section 9
Change in Control. . . . . . . . . . . . . . . . . . . . . . . 5
9.1 In General . . . . . . . . . . . . . . . . . . . 5
9.2 Definition . . . . . . . . . . . . . . . . . . . 5
Section 10
Amendment, Modification, and Termination of Plan . . . . . . . 6
10.1 Amendment, Modification, and Termination of
Plan . . . . . . . . . . . . . . . . . . . . . . 6
Section 11
Requirements of Law. . . . . . . . . . . . . . . . . . . . . . 6
11.1 Requirements of Law. . . . . . . . . . . . . . . 6
11.2 Governing Law. . . . . . . . . . . . . . . . . . 6
<PAGE>
EXHIBIT 4.1
TUCSON ELECTRIC POWER COMPANY
1994 OUTSIDE DIRECTOR STOCK OPTION PLAN
Section 1
Establishment, Purpose and Effective Date of Plan
1.1 Establishment. Tucson Electric Power Company, an
Arizona corporation, hereby establishes the "Tucson Electric
Power Company 1994 Outside Director Stock Option Plan" (the
"Plan") for non-employee members of the Board.
1.2 Purpose. The purpose of the Plan is to enable the
Company to attract and retain highly qualified non-employee
members of the Board by providing to them a significant equity
interest in the Company, and to help provide such non-employee
members of the Board of Directors with reasonable and fair
compensation.
1.3 Effective Date. The Plan shall become effective
immediately upon its adoption by the Board of the Company (the
"Effective Date") subject to its ratification by the shareholders
of the Company and the receipt of any necessary governmental
approvals.
Section 2
Definitions
2.1 Definitions. Whenever used herein, the following terms
shall have their respective meanings set forth below:
(i) "Annual Award Date" means the first and each
succeeding anniversary of the Initial Award Date.
(ii) "Board" means the Board of Directors of the
Company.
(iii) "Company" means Tucson Electric Power Company, an
Arizona corporation.
(iv) "Eligible Directors" means those non-employee
members of the Board who are eligible to participate in the
Plan under Section 3 hereof.
(v) "Fair Market Value" means the average of the
highest and lowest sales prices of the Stock as reported on
the consolidated tape for securities listed on the New York
Stock Exchange on a particular date. In the event that
there are no Stock transactions on such date, the Fair
Market Value shall be determined by utilization of the above
formula as of the immediately preceding date on which there
were Stock transactions.
(vi) "Ineligible Directors" means those non-emeritus
members of the Board who are not eligible to participate in
the Plan.
(vii) "Initial Award Date" means the first business day
of the calendar month following the ratification of the Plan
by the shareholders of the Company and the receipt of any
necessary governmental approvals.
(viii) "Option" means a "nonstatutory stock option" (an
option which is not an incentive stock option as described
under Section 422 of the Internal Revenue Code of 1986, as
amended).
(ix) "Stock" means the Common Stock of the Company, no
par value.
Section 3
Eligibility
3.1 Eligibility. All members of the Board are eligible to
participate in the Plan, unless they are common law employees of
the Company or emeritus directors of the Company.
Section 4
Administration
4.1 Administration. The Ineligible Directors shall be
responsible for the administration of the Plan. The Ineligible
Directors, by majority action thereof, are authorized to
interpret the Plan, to prescribe, amend, and rescind rules and
regulations relating to the Plan, to provide for conditions and
assurances deemed necessary or advisable to protect the interests
of the Company, and to make all other determinations necessary or
advisable for the administration of the Plan, but only to the
extent not contrary to the express provisions of the Plan.
Determinations, interpretations, or other actions made or taken
by the Ineligible Directors in good faith pursuant to the
provisions of the Plan shall be final, binding and conclusive for
all purposes and upon all persons whomsoever.
The Ineligible Directors may, from time to time, appoint a
Company employee to administer, construe and/or interpret the
terms of the Plan.
Section 5
Duration of Plan
5.1 Duration of Plan. The Plan shall remain in effect,
subject to the Board's right to terminate the Plan pursuant to
Section 10 hereof, provided, however, that no Option may be
granted under the Plan on or after the tenth (10th) anniversary
of the Plan's effective date.
Section 6
Stock Options
6.1 Initial Grant. On the Initial Award Date, each
Eligible Director shall receive Options to purchase 6,000 shares
of Stock, which shall be exercisable on the terms set forth
herein. Each individual who becomes an Eligible Director after
the Initial Award Date shall receive initial Options to purchase
6,000 shares of Stock on the date he becomes an Eligible
Director. The shares of Stock to be delivered under the Plan may
consist, in whole or in part, of authorized but unissued stock or
treasury stock, not reserved for any other purpose.
6.2 Annual Awards. On each Annual Award Date following the
Initial Award Date, each person who is an Eligible Director on
that date shall receive Options to purchase 6,000 shares of
Stock, which shall be exercisable on the terms set forth herein.
6.3 Exercise Price. Each Option granted hereunder shall
have an exercise price equivalent to the Fair Market Value of the
Stock on the day such Option is granted.
6.4 Vesting. Awards made on the Initial Award Date, on the
date of initial grant to an Eligible Director after the Initial
Award Date, and on any Annual Award Date shall vest ratably and
become exercisable in 1/3 increments on each anniversary of the
date of Grant.
6.5 Expiration. Except as otherwise provided in Section
8.1 hereof, Options granted hereunder shall expire ten years from
the date of the award of the Option.
6.6 Payment. The purchase price of Stock upon exercise of
any Option shall be paid in full either (i) in cash, (ii) in
Stock valued at its Fair Market Value on the date of exercise or
(iii) by a combination of (i) and (ii) at the discretion of the
Ineligible Directors. The Ineligible Directors in their sole
discretion may also permit payment of the purchase price upon
exercise of any Option to be made by (i) having shares withheld
from the total number of shares of Stock to be delivered upon
exercise or (ii) delivering a properly executed notice together
with irrevocable instructions to a broker to promptly deliver to
the Company the amount of sale or loan proceeds to pay the
exercise price. The proceeds from payment of option prices shall
be added to the general funds of the Company and shall be used
for general corporate purposes.
6.7 Agreement. Options awarded under this Plan will be
evidenced by an agreement in writing, signed by the Option holder
and a duly authorized representative of the Company.
6.8 Lapsed Awards. Subject to the express provisions of
the Plan, if any Award granted under the Plan terminates, expires
or lapses for any reason, any Stock subject to such Award again
shall be available for the grant of an Award.
6.9 Restrictions on Stock Transferability. The Ineligible
Directors shall impose such restrictions on any shares of Stock
acquired pursuant to the exercise of an Option under the Plan as
it may deem advisable, including, without limitation,
restrictions under applicable Federal securities law, under the
requirements of any stock exchange upon which such shares of
Stock are then listed and under any blue sky or state securities
laws applicable to such shares.
6.10 Non-Transferability of Options. No Option granted
under the Plan may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, otherwise than by will or by
the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined by the Internal Revenue Code
of 1986, as amended, or Title I of the Employee Retirement Income
Security Act of 1974, as amended, ("ERISA"), or the rules
thereunder.
6.11 Beneficiary Designation. Each Eligible Director may
name, from time to time, any beneficiary or beneficiaries (who
may be named contingently or successively) to whom any benefit
under the Plan is to be paid in case of his death before he
receives any or all of such benefit. Each designation will
revoke all prior designations by the same participant, shall be
in a form prescribed by the Ineligible Directors, and will be
effective only when filed by the participant in writing with the
Ineligible Directors during his lifetime. In the absence of any
such designation, benefits remaining unpaid at the Participant's
death shall be paid to his estate.
Section 7
Adjustment in Capitalization
7.1 Adjustment in Capitalization. In the event of any
change in the outstanding shares of Stock that occurs after
ratification of the Plan by the shareholders of the Company by
reason of a stock dividend or split, recapitalization, merger,
consolidation, combination, exchange of shares, or other similar
corporate change, the aggregate number of shares of Stock to be
granted, the aggregate number of shares subject to each out-
standing Option, and its stated exercise price, shall be adjusted
appropriately by the Ineligible Directors, whose determination
shall be conclusive; provided, however, that fractional shares
shall be rounded to the nearest whole share.
Section 8
Termination of Service
8.1 Termination of Service. If the service of an Eligible
Director is terminated for any reason other than involuntarily
for cause, the rights under any then outstanding Option which has
vested under Section 6.4 hereof shall terminate upon the
expiration date of the Option or six months after the termination
of service as an Eligible Director, whichever occurs first.
Where the service of an Eligible Director is terminated by reason
of death, the rights under any outstanding Option which has
vested at the time of the Eligible Director's death may be
exercised by the Eligible Director's personal representative
within the time permitted under this paragraph. Where
termination of services as an Eligible Director is involuntary
for cause, rights under all Options shall terminate immediately
upon termination of service.
Section 9
Change in Control
9.1 In General. In the event of a change in control of the
Company as defined in Section 9.2 below, all Options under the
Plan shall vest 100%, and shall be immediately exercisable by the
holder.
9.2 Definition. For purposes of the Plan, a "change in
control" shall mean any of the following events:
(i) the Company receives a report on Schedule 13D filed
with the Securities and Exchange Commission pursuant to
Section 13(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") disclosing that any person,
group, corporation or other entity is the beneficial owner
directly or indirectly of thirty percent or more of the out-
standing Common Stock of the Company;
(ii) any person (as such term is defined in Section
13(d) of the Exchange Act, group, corporation or other
entity other than the Company or a wholly-owned subsidiary
of the Company, purchases shares pursuant to a tender offer
or exchange offer to acquire any Common Stock of the Company
(or securities convertible into Common Stock) for cash,
securities or any other consideration, provided that after
consummation of the offer, the person, group, corporation or
other entity in question is the beneficial owner (as such
term is defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of thirty percent or more of the
outstanding Common Stock of the Company (calculated as
provided in paragraph (d) of Rule 13d-3 under the Exchange
Act, as amended in the case of rights to acquire Common
Stock);
(iii) the stockholders of the Company approve (a) any
consolidation or merger of the Company in which the Company
is not the continuing or surviving corporation or pursuant
to which shares of Common Stock would be converted into
cash, securities or other property, or (b) any sale, lease,
exchange or other transfer (in one transaction or a series
of related transactions) of all or substantially all of the
assets of the Company; or
(iv) there shall have been a change in a majority of
the members of the Board within a 24 month period unless the
election or nomination for election by the Company's
stockholders of each new director was approved by the vote
of two-thirds of the directors then still in office who were
in office at the beginning of the 24 month period.
Section 10
Amendment, Modification, and Termination of Plan
10.1 Amendment, Modification, and Termination of Plan. The
Board at any time may terminate, and from time to time amend or
modify the Plan, provided, however, that any such action of the
Board shall be subject to approval of the shareholders, to the
extent required by Rule 16b-3 of the Exchange Act or otherwise by
law.
No amendment, modification, or termination of the Plan shall
in any manner adversely affect any Option theretofore granted
under the Plan, without the consent of the Option holder. In no
event shall the provisions of this Plan be amended more than once
every six months, other than to comport with changes in the
Internal Revenue Code, the Employee Retirement Income Security
Act, or the rules thereunder.
Section 11
Requirements of Law
11.1 Requirements of Law. The granting of Options and the
issuance of shares of Stock upon the exercise of an Option shall
be subject to all applicable laws, rules, and regulations, and to
such approvals by any governmental agencies or national
securities exchanges as may be required.
11.2 Governing Law. The Plan, and all agreements hereunder,
shall be construed in accordance with and governed by the laws of
the State of Arizona.
<PAGE>
EXHIBIT 4.2
TUCSON ELECTRIC POWER COMPANY
AWARD NOTICE AND OPTION AGREEMENT
OUTSIDE DIRECTOR GRANTEE
This Agreement between Tucson Electric Power Company (the
"Company") and _________________ (the "Grantee") sets forth
specific terms and benefits which apply to the Grantee under the
Tucson Electric Power Company 1994 Outside Director Stock Option
Plan ("Plan").
1. NOTICE OF AWARD OF STOCK OPTIONS: The Company hereby awards
options to the Grantee to purchase the Company's common stock as
follows:
Stock Option Grant No. ###
Date of Grant #####
Total Number of Options Granted #####
Exercise Price Per Share #####
Expiration Date of Unexercised Options #####
Options shall vest ratably and become exercisable in one-third
(1/3) increments on each anniversary of the grant date. This
award is subject to the: (a) terms and conditions of the Plan;
(b) Policies and Procedures necessary for Plan administration;
and (c) provisions of this Agreement.
2. BINDING EFFECT: This Agreement shall inure to the benefit of
the successors and assigns of the Company and shall be binding
upon the Grantee and the spouse, heirs, executors,
administrators, successors and assigns of the Grantee.
3. INTEGRATED AGREEMENT: This Agreement and the Plan constitute
the entire understanding and agreement of the Grantee and the
Company regarding the Plan and the award of options. There are
no other agreements, understandings, representations or
warranties between the Grantee and the Company other than those
set forth or provided for herein or in the Plan. This Agreement
does not constitute a contract for employment with or continuing
services to the Company. The provisions of this Agreement and
the Plan shall survive any exercise of options, and shall remain
in full force and effect until the exercise or expiration of the
options awarded.
4. SUBJECT TO PLAN: Except as may be specifically set forth
herein, the rights of the Grantee are subject to the terms and
conditions of the Plan, including Policies and Procedures
established to effect its administration. The provisions of the
Plan are incorporated by reference.
5. GOVERNING LAW: This Agreement shall be construed in
accordance with and governed by the laws of the State of Arizona.
<PAGE>
IN WITNESS WHEREOF, the Company and Grantee have executed this
Agreement.
TUCSON ELECTRIC POWER COMPANY
Dated: _____________ By: ___________________________
The Grantee represents that he/she is familiar with the terms and
provisions of this Agreement and the Plan, hereby acknowledges
receipt of both documents, and hereby accepts the options subject
to all of the terms and provisions thereof. The Grantee is aware
that exercise of these options constitutes a purchase for
purposes of Section 16(b) of the Securities Act of 1933.
GRANTEE
Dated: _______________ By: __________________________
<PAGE>
DENNIS R. NELSON
GENERAL COUNSEL
UNISOURCE ENERGY CORPORATION
220 WEST SIXTH STREET
TUCSON, ARIZONA 85701
January 2, 1998
UniSource Energy Corporation
220 West Sixth Street
Tucson, Arizona 85701
Re: Registration on Form S-8 of Unisource
Energy Corporation (the "Company")
Gentlemen:
At your request, I have examined the Registration
Statement on Form S-8 to be filed with the Securities and
Exchange Commission in connection with the registration under the
Securities Act of 1933, as amended, of 120,000 shares of Common
Stock, without par value, of the Company (the "Common Stock"),
and additional rights (together with the Common Stock, the
"Shares"), to be issued pursuant to the UniSource Energy
Corporation 1994 Outside Director Stock Option Plan (the "Plan").
I have examined the proceedings heretofore taken and to be taken
in connection with the authorization of the Plan and the Shares
to be issued pursuant to and in accordance with the Plan.
Based upon such examination and upon such matters of
fact and law as I have deemed relevant, I am of the opinion that
the Shares have been duly authorized by all necessary corporate
action on the part of the Company and, when issued in accordance
with such authorization, the provisions of the Plan and relevant
agreements duly authorized by and in accordance with the terms of
the Plan, will be validly issued, fully paid and nonassessable.
I consent to the use of this opinion as an exhibit to
the Registration Statement.
Respectfully submitted,
/s/ Dennis R. Nelson
Dennis R. Nelson
General Counsel
<PAGE>
January 5, 1998
Tucson Electric Power Company
220 West Sixth Street
Tucson, Arizona 85701
We have made a review, in accordance with standards established
by the American Institute of Certified Public Accountants, of the
unaudited interim financial information of Tucson Electric Power
Company and subsidiaries for the periods ended March 31, 1997 and
1996, June 30, 1997 and 1996 and September 30, 1997 and 1996 as
indicated in our reports dated May 2, 1997, July 31, 1997 and
October 20, 1997, respectively; because we did not perform an
audit, we expressed no opinion on that information.
We are aware that our reports referred to above, which were
included in your Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1997, June 30, 1997 and September 30, 1997 are
being used in this Registration Statement.
We also are aware that the aforementioned reports, pursuant to
Rule 436(c) under the Securities Act of 1933, are not considered
a part of the Registration Statement prepared or certified by an
accountant or a report prepared or certified by an accountant
within the meaning of Sections 7 and 11 of that Act.
/s/ Deloitte & Touche LLP
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of UniSource Energy Corporation and its subsidiaries on
Form S-8 of our report dated January 27, 1997, appearing in the
Annual Report on Form 10-K of Tucson Electric Power Company and
its subsidiaries for the year ended December 31, 1996.
/s/ Deloitte & Touche LLP
January 5, 1998
